A bit hard to short the market as these levels as far as risk is concerned which means a good time to brush up on what constitutes a bottom signal to buy while we stay mainly in cash. Market has rolled over indeed for those who took the accelerating warning phases last week and shorted then. Now, a bit late to that party.
S&P 500 (SPY) 132.50 next support area.
Russell 2000 (IWM) Under 78.00 and 75.50 looks obvious. Above Monday's high though-be flexible
Dow (DIA) Oversold daily RSI
NASDAQ 100 (QQQ) 63.48 last week's low making that the new key area to watch
GLD Got short at 162, covered at 155 and missed this last leg down as oversold
XLF (Financials) 14.35ish the retracement to the weekly moving average
IBB (Biotechnology) Here is one reason it is hard to short now-this group had an inside day way outperforming
SMH (Semiconductors) Want to see if 32.15 holds-then might look here for strength
XRT (Retail) Broke the bear flag and now looking at last week's low 58.57.
IYT (Transportation) 91.00 important and still holding
IYR (Real Estate) Must clear 64.00 or see what happens at 63.00. But this and biotech are markets best hope right now
USO (US Oil Fund) oversold
OIH (Oil Services) Daily really, really oversold-this is not where I would go for shorts right now
TBT (Ultrashort Lehman 20+ Year Treasuries) Weekly RSIs very oversold
Longs: On categories: Gap higher days we go to all categories and choose ones with lowest risk that break the opening range. On weaker days, we look at Category 3, especially if the picks hold S1, previous day lows or a major moving average and have a good risk on the reversal. The difference between Category 1 and 2 is the stock condition-a Condition 1 is strongest stock and more likely to make a parabolic move. Note: Looked for picks that held Friday's low or way oversold against major support
Category 1: (Aloha) Positive Phase, Condition 1, 2 days under the FTPs, Risk to Previous Day low, Can buy ½ over FTP and ½ over R1, Target- Day to at least 3 ATRs from entry:
AOL 25.43 the 10 DMA support, must clear R1
CREE 3 days under pivots 30.70 swing risk 31.05 miniswing risk and should clear pivots then R1
Category 2: (Pipeline) Positive Phase, Condition 2-3, 2 days under the FTPs, Risk to Previous day low, Can buy ½ over FTP and ½ over R1, Target- Day to at least 3 ATRs from entry:
EW Only 1 day under pivots but negatively stacked for 3 days. Must clear R1 then the 10 DMA risk today's low
Category 3: (Double Up) Positive Phase, Condition 1 through 4, Positive Pivots which means candidate for Opening Range Reversal, Risk S1 or previous day low, whichever is lower unless noted differently, Target- Day to at least 3 ATRs from entry:
BBBY Inside day. 69.50 the 10 DMA
Note: These all held prior day lows, were Category 3, now pivots negative. Risk is today's low, must clear R1: EQR MCK BUD CERN SPG SWI
Category 4: (Rip Tide) Oversold (2 or more days under FTP), Condition 1-4, Needs to clear R1, Risk previous day low unless noted differently, Target- Day to at least 3 ATRs from entry:
ACE Inside narrow range day. Outperformed has to clear 76.25 and hold Friday low
DOV Possible slingshot if holds today's low and the 200 DMA
LMT Possible slingshot against today's low
Other: COG Must hold today's low and clear 35.45 X Must break today's high YOKU positive pivots must hold 23.20 break 24.25 NTAP Must hold 35.40 clear today's high BA Must clear R1
Shorts:
ADTN Must not clear today's high
APKT Must not clear 25.08
BHI Cannot clear 41.89
DECK Must wait for it to break today's low
ANF Must not clear today's high
Goodnight!
